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Squawk on the Street

News/Business. Melissa Lee, Carl Quintanilla, David Faber. Opening bell market action. New.

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03:00:00

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Us 26, U.s. 23, Boston 23, China 21, New York 18, Nemo 10, Europe 10, Aol 10, Carl 8, Moody 's 8, S&p 7, Tim Armstrong 7, Tim 6, America 6, Sandy 6, Kimco 6, Simon 6, Apple 5, Richard Blumenthal 5, Jim 5,
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  CNBC    Squawk on the Street    News/Business. Melissa Lee, Carl Quintanilla,  
   David Faber. Opening bell market action. New.  

    February 8, 2013
    9:00 - 12:00pm EST  

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so that isn't going to change. it's just going to be how we make money. how do you approach -- >> but how do companies -- >> well, perhaps are going to have to start charging for their app. i mean, maybe get on facebook, it's $10 a month or something. but it's not just a pure ad model anymore. it can't be. can't be. >> all right. great to have you, carol. >> thank you. >> i don't know about golf -- >> you didn't ask me about my golf game. >> how are you doing? >> i'm working with a pga champ, and it's helping. >> he won a tournament where i was. tucson open. >> really helping. >> nice kid. yeah. excellent. thank you, carl bartz. we appreciate it. we'll send it back to mr. sorkin in the studio. >> thank you, mr. concernan. by the way, we're rooting for you this weekend. i hope you'll take a nap after
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this before you get on the course. >> i'll buy some brain pants, andrew. >> ask him if he looks like you need a nap? >> yeah, do i look like i need a nap? probably. >> we've got to say thank you to our other guest host who has been back with us, jeremy siegel, the bull. steve liesman, also thank you for sitting in all week. that's been terrific. becky and joe, it's been great. good luck over the weekend. we hope you get back here and it all works out. say hello to nemo and the weather. we're going to see you -- >> be careful with all that snow. >> absolutely. anyway, make sure you join us monday. "squawk on the street" begins right now. good friday morning. welcome to "squawk on the street." i'm melissa lee.
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we're live from the new york stock exchange. let's see how your friday session is setting up on the u.s. futures. it looks like we'll have a positive session with the s&p looking at 2 at the open, dow looking at 13. in europe, the eu summit continues. but the action really taking its cues from china this morning. we have green arrows across the board in europe. take a look at asia. strong eco data out of china in focus. much more on that in just a moment. the road map begins at the golden arches. not even the cheddar onion burgers could help mcdonald's. they missed estimates in every region. asia was down a whopping 9.5%. >> exports boomed 25%, inflation cooled, but met expectations, capping off a two-week winning streak for stocks. >> a blowout quarter, users increase continued in momentum. >> the storm could be one for the record books. forecast calling for as much as
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2 1/2 feet of snow in some parts of the northeast. already more than 3,700 flights have been canceled. we'll get more from the weather channel on the path of nemo. mcdonald's down 1.9 in january. middle east and africa, europe saw a 1%, 2% decline. u.s. the only bright spot. comps up 9%. even some suggestion that asia, which is 40% japan, but also china, got tainted with the chicken contamination scare. >> that wouldn't surprise me. i think don's doing a terrific job. he came in with a great legacy there. but they hadn't developed new products. i actually drilled down the idea that the stock is not down because they figured out the
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value of the meal in the u.s. then you can blow that out overseas, when you have the taint of china. i'm questioning why the stock isn't down $1. >> you've got to take a look at the asia decline, 9.5%. a lot of that was japan. japan is a huge component of that number. japan was down 17%. that cannot be ignored when it comes to asia. >> a lot going in japan that is causing the 17%. >> they've had pricing issues over the past couple of years. not sure specific to january. they did say february would be impacted, could be as much as 3%, because the year ago had an extra leap year day. december was impacted by the fact they were open on christmas day. it's really come down to that incremental, that marginal day you get every month. >> i remember when coca-cola had high single-digits in japan. i'm giving don the benefit of the doubt. i want to know what you think. you spent a lot of time with him. >> don, of course, is an
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engineer, so he knows operations. their coo was the old asia pacific guy. the management is well experienced. i think there is some interesting questions about the blizzard. we'll talk a lot of weather today. >> dairy queen product, about 900 calories. >> that's a big play. >> the blizzard also reported numbers. >> david, nice pull. >> hear me out. m&ms, and black ops, which is the new game, you might have a 12,000 calorie blizzard. yes. the blizzard's going to play a role. >> you've got tens of millions of people whol be immobilized for some period of time this weekend. that's going to have an effect just on -- >> i keep going bake ck to macy and that's a terrific number. the storm, i'm thinking geographically and
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meteorologically -- >> the blackship store on fifth avenue gets a lot of snow. >> the other side has tended to be -- is that not right, the weather forecast that i offer. al roker theory. >> boston they had getting 12 feet of snow. >> that would be something. >> 12 feet of snow, geez. >> you know, a lot of policy skeptics, data skeptics say we're going to have to wait two months for clean data again, because everyone's going to want to use nemo, as we're calling it, as an excuse. >> one of the things that i think maybe this is something that travelers once talked to us about, david. the idea that there is a new normal in weather, has eluded a lot of different companies. not travelers, because they think the weather patterns have switched. the once in a hundred is no longer once in a hundred. it's once every couple of years. >> once every couple of months conceivably. you're hearing again this once
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in a hundred blizzard now, you heard it with sandy, once in a year storm. okay. >> we've got to do our -- >> and we are now patterning weather much differently than we used to. >> yes. >> the other guys, by the way, they've raised rates dramatically by the weather. 52-week high hitters. so what's bad for the goose of sachs and tiffany may be good for the gander of the cash in the companies to have a fairy tale, the nursery rhyme thing. i always try to integrate the younger crowd, because they may be staying home today. >> it could be educational for them. >> yes. >> get them early. >> i think they're going for the younger demographic now with the nemo. remember when nemo was an e-ride? >> phinius and ferb.
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>> sports surging 25% in january compared to a year ago, with imports rising 28.8%. $29.2 billion trade, new lending by china's banks beat expectations and consumer inflation fell to 2% from seven-month highs set in december. so inflation is cooling. came in line, but cooling. >> trade is booming. >> this is exactly what you want. >> exactly. isn't this what allows the new communist party, and i do believe this is a signal it has worked. klaus kleinfeld was predicting they could sptep on the gas and not incite inflation. isn't that exactly what's happening? it's a virtuous cycle before being a vicious cycle. >> it is. and we still haven't had the
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full leadership transition yet. that will be in march. >> right. >> i think they're mandating 11% gdp. that's not a target, that's a mandate. 400 million people right now are still going from rural to urban. that is rather amazing. >> that's incredible. china is an incredible -- it's funny, i'm been hearing a chorus from u.s. ceos and businesses considering expanding in china. the continued accounting issues, the cyber espionage and espionage issues, the m & a issues are all -- people are starting to pull back. and wonder, you know, is it worth it. is it worth it. >> they had a blowout quarter. ralph lauren bought back its rights in china. blowout quarter.
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these are companies saying 400 million people going -- they like mac, which is a brand of este lauder that you probably -- your wife may see. >> mac. >> i've seen that around, yeah. >> and look, one of the things that ralph lauren did wrong is they gave all these licenses to china. they're taking them back, bringing in the purple label and black label to china. that's actually a good suit. >> got it. >> and i think it could mean a great deal. so i think espionage away from slacks, and perfume -- >> there's another -- there's the counterfeiting for those. >> there's counterfeiting for those. no respect for property. this is about exports from china, not imports. i'm just saying, that u.s. businesses, i'm starting to hear more concern about, is it worth putting it all -- >> google doesn't need china, you mean that kind of thing? >> right. caterpillar, what happened to them. >> the scandal. >> just these things add up.
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keep an eye on m & a and how they go after some of our deals. even the dell deal, not using it for what it should be used, just up or down. >> apple hfrica has come back. there are many ngos, nongovernment organizations, that are flying under the chinese flag. not the united states flag or any european country, because it will not be shot upon by even the worst of the -- this is my insight. because china has decided to become the united states when it comes to what we used to do in foreign countries. just something to watch. >> i agree with you. this is something to watch. >> becoming a global power. >> control of resources. when you need a lot of resources to move all those 400,000 people to the city. >> a couple of headlines from the new york stock exchange. regarding winter storm, they say
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they do expect business as usual. this is according to a spokesperson. keeping member firms and traders informed of the weather reports. remember, we had some issues during sandy, obviously, where the exchange had to work mightily to open. it says it has contingency plans in effect. the surge they're talking here in new york is three to five feet. sandy was 13 feet. >> far different. >> ostensibly under a lot less pressure, but you never know what the storm's going to bring. >> up in the boston area, i believe it could be more significant. and again, with the high tides, highest tide of the month, what time will the surge be. i know there's a lot of focus on that. >> people should listen to the safety. >> watching shares of linkedin today. all new-time highs. blowing past expectations with its earnings. revenues up 81%.
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mostly coming from linkedin's recruitment services. stocks up almost 80% in the last 12 months. there are stories where even head-hunters are under severe pressure, because linked-in is taking away their business. >> one of the things that was amazing in this conference call is they're in portuguese, they're taking over brazil, they've got germany. the recruiters want them in their countries. they also had an ad business that was up 60%. this company at $20 billion is a company that facebook should buy. >> you literally dropped the mike on that one. cramer, out. >> it's too valuable. too valuable property. you always look at me with some sort of, let's say specious eyes. this is a company that has figured out mobile, it has figured out global, it's indispensable in a whole bunch of countries. people were willing to pay
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fortunes for, i don't know, yelp at one time. >> it's getting awfully large. >> it is getting large. >> not an insignificant acquisition for any company. >> except for apple. >> they have a vision they're executing on. >> were you doubtful at the start as >> a lot of people may not have fully appreciated the power of the model, and what they could do, how they could scale. >> how about this influence of the product that i know cnbc -- >> we had the -- the first person in charge of implementing it when it first came out, we were skeptical of how you would have content, is that really going to get people to be premium subscribers. apparently it has. town solutions up 90% as you mentioned. premium subscriptions were up 79% year on year. the best part about it is they are actually going to increase prices, when it comes to recruiter and job slots. >> think about that. >> i mean, first of all, they're making mon, monetizing mobile and they're able to increase
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prices. that's something you don't often hear from these. >> other than bloomberg's "new york times", that's an acquisition i've been predicting. >> is soulsberg going to go along with it? >> i think he would be a super combo. but other than the "times," and linkedin, i don't know anyone who's been able to raise the prices. >> you would rather see bloomberg buy it than trump? >> i think bloomberg's got more of a media bent. >> i understand. he's not going to be mayor anymore. he still wants to have great influence. $25 billion does give you a lot of influence, i believe. forgetting whether you buy the newspaper or not. >> maybe bloomberg should do some perpetual preferred against its existence. offer 4%. raise the value of the family's worth to, what, $40 billion? what would einhorn say? >> i don't know.
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>> do you think if i'd have gotten the mets we would be in this problem? >> you would have less time. >> that would take up 80% of his time? how much does he have? >> he's still getting money, that's true. apple indicated at 473. that's another talker for today. >> really? >> when we come back, the winter storm called nemo about to blitz the northeast. two feet possible for new england. when we come back, the weather channel's jim cantore in boston tracking that story. a live interview with aol ceo tim armstrong. and another look at futures as we jug will both the markets and the storm today. "squawk on the street" is back in a minute. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts
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save get a sealy queen set on befor just $399.osturepedic. even get 3 years interest-free financing on tempur-pedic. keep more presidents in your wallet. sleep train's presidents' day sale is on now. you all remember what happened during sandy. the challenges that the new york stock exchange had staying open. under generator power in some cases. it was the only source of light in all of lower manhattan. a different scenario perhaps this weekend as nemo approaches. but the exchange is saying business as usual, and the contingency plans. >> the stock up 10%. >> that was a hot name.
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>> it was up yesterday, too. he bought the generator, not the stock. >> true. >> briggs and stratton have a similar one. it's smaller. but it does get the job done. it keeps your circuit breaker from blowing. it was a huge contributor to their earnings last quarter. >> right. as you know, the northeast pricing for that storm, nemo could dump a foot of snow in the new york metro area. up to two feet in new england. the weather channel's jim cantore is in boston where they're preparing for the blizzard. jim? >> hey, guys, it's not often i bring one of these with me when i go out and cover a storm. but this storm is worthy of a yardstick. we're going to be measuring store at least 3/4 of the way up this thing. believe it or not, we could have more than 36 inches. we could be talking about as much as 46. this will be a big blockbuster storm. there's only one saving grace, is the fact that it comes in overnight, that the worst of the storm overnight tonight and
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tomorrow morning when people don't have to get out. the blizzard of '78, it was my coming out party, as a weather man. and i've got to tell you, the scenes are fresh in my mind right now. route 128 with cars, or just car tops, because that's all you could see of them, were left with people stranded in their vehicles. the governor said we don't want anything like that to happen this time. he wants things shut down at noon. that's a pretty good way to handle this. it is the dynamic one. when you get these kind of snowfalls, you're going to have a crippling storm, to say the least. >> when is the snow expected to start, jim, in boston? >> i think probably the next couple of hours. it will be light, probably through the afternoon. and then about sunset, which is what i'm thinking, we're going to start getting into some pretty intense snow here in the boston area. you talk about the massachusetts turnpike, route 128, 195, 95,
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down through connecticut, heavily impacted here as we go through the next hours. of course, overnight, all bets are off. everybody needs to be off the roads, because it will be a blinding blizzard. we're talking winds 50, 60 miles per hour in through here. nobody's going anywhere, certainly, in that kind of weather. amtrak's already shut down the trip from boston to new york. the airports have canceled almost 3,000 flights at this point. anything they can do to basically shut down the northeast, that's what they're doing. rightfully so. think about the areas that were weakened along the shoreline from sandy already. and you take this pounding surf and wave action. we're going to have more issues with possible destruction, believe it or not, in some of these areas that have been hurt already. it's going to be a big storm. >> jim cantore in boston. you know, this is going to be the big second quarter of earnings. >> how about this brilliant interior secretary pitch by obama. recreational equipment.
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readiness. >> yes. >> interior secretary can scale mountains. >> indeed. >> when we come back, seeking shelter from the bears. we'll find out in "mad dash." we close out the week, if the dow wants to avoid the first losing week of the year, got to close at 14,009. back in a minute. [ male announcer ] i've seen incredible things.
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minutes until the last opening bell of the week. let's get cramer's "mad dash." we'll talk to tim armstrong in the next hour. >> tim armstrong has done remarkable things for a company that people thought was dead. i am shocked at the revenue growth here. that had been a very big issue. one thing to ask tim about at 10:15, the buyback, they've shrunk share count in two years from $106 million to $88 million. this is a cash flow generator. carl, a lot of people thought this company was dead. i think this is the case where a ceo has really made a monster difference. so successful. so good. >> yes. first revenue year over year increase in eight years? >> isn't that incredible? >> eight years. >> how can this not take out that high. i think this is really a
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testament to someone who came into a situation -- i remember when he took the job. a lot of people were saying, that's the end of his career. >> sure. took lumps on that as well. >> yes. and patch, which i now go to all the time. i don't know if they've been able to turn around patch. i think this guy should be the executive of the year if he pulls this one off, because when you resurrect a company that had been the butt of many jocks when time warner bought them -- i know david is going to fume at this. if he could ever get it back to where time warner paid for aol, i'm going to make him the ceo of the millennium. >> that would be an amazing reversal. when we come back, senator richard blumenthal bracing for storms in his home state of connecticut. and actions about to heat up down here at the big board. recognize me.
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financial capital of the world, where we are waiting for the friday opening bell. we're also waiting the brunt of a storm that is going to potentially cripple us here in the northeast. boston expecting as much as 42 inches of snow. that's a whole lot of snow. a lot of snow. at the new york stock exchange, things running as usual. there are contingency plans in place as it is with every storm. but things are up and running. and looks like a full floor here at the new york stock exchange. [ bell ringing ] rbs at the nyse. and mattel doing the honors at the nasdaq. goldman sachs coming out this morning, reiterating a con vick buy on the name and price target of $660. it was interesting price action
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yesterday, apple surged into the close. i think the thinking is whether or not apple goes along with what david einhorn is proposing when it comes to the shares. something will happen, whether it be einhorn's proposal, or just a buyback. >> i think it came out around 3:40 yesterday our time, apple put it out. we're not against what he wants to do. but secondly, $45 billion coming back to shareholders in the third period. and tim cook, what, coming to goldman sachs? so there are meetings with other people. i think that release basically said, you don't think we don't have something in stores? they need every penny -- >> we had a brief conversation at the end of "squawk box," what are you talking about? >> maybe they need to build a parallel network. maybe they need to buy dish.
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maybe they need to give verizon a check to own 50% of fios. verizon's very happy with the vodafone relationship, why not have an apple relationship. >> that would be an end run around the cable companies as they try to make apple tv, or some new product. >> yes. >> ubiquitous. they can't get the same deal that they got when steve jobs introduced the ipod and itunes. >> and it's very clear that jobs was proud to being able to roll this. you can't roll the cable companies. >> you're in people's homes with your own network providing an operating system that is apple's, for all of your needs. >> wi-fi, satellite. so it's your ipad, tell your ipad, when i get home, i want to
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watch "squawk on the street," it comes on. you have this seamless thing. it could be dish. get this package. i think apple -- >> it would be more than $100 billion. >> perhaps that's why they say they need every penny. >> wow. that could be completely transformative. >> apple's not saying this plan. this is the jim cramer i know what to do with -- you know, after you bought linkedin and netflix. but let's think big. maybe they have it because it's not a rainy day. maybe they have it because they want to be a worldwide cable company. cbs could be for sale. redstone won't live forever. >> but you can't confuse it with distribution. cbs is purely -- in other words, you're talking about them buying content companies and potentially trying to buy distribution companies. >> put the numbers together, it's surprisingly small versus the cash flow. this is just my musings.
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>> a press release was a surprise in and of itself. >> we have $45 billion we'll get back. what do you need money for? you could become an international supplier of entertainment, i only want espn or i only want cnbc. >> we should keep an eye on linkedin. at an all-time high. we look over the quarter and we talked about it in the first half of the show. >> a lot of shorts. >> yes. which makes you wonder where a lot of the pressure points are for shorts. >> facebook, charitable trust. here's my point on facebook, by the way. another acquisition that i think the antitrust department would allow, could also make it so that apple's got 1 billion worldwide cable subscribers via facebook. you build in tv via facebook. there's a dovetail.
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they'll need every penny for that. i'll take no investment cut that goldman puts together. >> no fee cramer. >> they can say, cramer is giving us an idea that i'll give 6% of. you should continue to watch the show, because it's good. >> you know in your heart that you had something to do with it. >> that's fine. >> there's satisfaction there. >> everybody else making tens of thousands of dollars? >> you did get paid something for doing iron man. >> 300 bucks. and a statue from iron man. >> who's your agent? get rid of him. >> that's not a good idea. >> not a good idea. >> that's something weird, i've got to tell you.
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>> the power company in new orleans, which was responsible for that super bowl blackout said the cause was a faulty electrical relay device, which has now been removed. >> there is a box between the superdome and facebook -- i mean, facebook, there you go -- superdome and energy. unfortunately the nfl has people who are very good engineers who were able to get the two sides to work, and that's why it came back. >> goodell also said, don't count new orleans out. >> coin star is down by 6.5%. earnings came in. they disappointed. the takeaway that a lot of analysts on the street this morning are making is that they are losing more share to netflix. they got a video streaming service, still in the beta stages. that's not going to help them right now. it's on the way. on the way may be too late. we're seeing shares under pressure. >> headwinds there, obviously, from the -- there's a couple of
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things, the dvd comps continue to show. netflix did pick up 2 million people. they came from somewhere. i think that this is a story where they try to put the best face possible on it. i don't think they succeeded. >> yeah. >> google, quit note here from morgan stanley, adding it to the best ideas list. target goes to 932. youtube, the most underappreciated, a sliver of the tv span, if they get it in the next seven years, a $20 billion opportunity. >> i thought that was interesting. they're talking about it being a major cable company basically. and also, they sing the praises of android. so i think this was compelling, because of one particular reason, they're using for -- are you ready for this -- for 2014 numbers, they say it sells at 13 times earnings. >> wow. >> fresh 52-week high for google, by the way. >> let's get to pisani and check
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out what's going on down at the floor on a friday. hello, bob. >> japan, have you seen the currency wars? they're really heating up. this is really high drama, folks. did you see the stock market in japan this week? it's been up 13 straight weeks. 20% rise in the nikkei. it was halted this week. what happened? draghi yesterday came out, jawboned the euro down and shot an arrow across the bow of japan. he did it in a way that didn't lower rates. he said, we're worried about the economic situation that keeps going up. we're going to act. immediately, the japanese finance minister came out overnight and said, you know, maybe the yen has depreciated a little too fast. it's down 20% against the euro. this is high drama. this is a sword fight. this is japan versus draghi right now. it's fun to watch. because the japanese are terrified to letting this go too far. you could see trade wars happening now. and that's why the finance
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minister came out very quickly and said, maybe it is going a little too far. japan is now seeing the other side of this currency war. meantime, the chinese markets, hey, china bottomed in the third quarter. we talked about this a while ago. did you see the trade data for china by and large? china's going to help global trade in 2013. that's the good news here. did you see our trade data here in the united states? i know this all sounds very wonky when we bring this up here at cnbc, but the bottom line on the trade data, our gdp for the fourth quarter i bet you will be revised into positive territory. remember, it was negative. i'll bet this will boost it into positive territory. those numbers, those trade data numbers this morning were very important. how about the housing recovery? i know, one day, every day, i keep talking about the housing recovery. look at louisiana pacific. i love that. kind of like apply wood, i used to carry this stuff in the '70s. very important in the building industry. beat on the top and bottom line. and the pricing is increasing
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for their main product. but they also make siding and they also make flooring, underflooring, that's very important in the building industry. the ceo was very optimistic. he said the u.s. housing recovery is picking up momentum. he also said it was happening in the third, fourth quarter as well. a week and a half ago, the builders show was in vegas two weeks ago. i used to go to this. national association of home builders. surprisingly optimistic for most of them. and the head of louisiana pacific mentioned that in his report. finally, exchange traded funds. i'm going to be at the inside etf conference on monday. this is the largest gathering of people involved in the exchange traded fund business. i think etfs are the most important development for individual investors in decades. go to my blog today. i explain why. we'll have all the big eyes in the business, vanguard, ishares, all of them on monday. guys, back to you. >> etfs are ruling.
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a lot of money have come into the market of etfs. can't wait to see that. let's shift to the bonds and the dollar. go ahead, rick. >> good morning, jim. you know, technicians are looking at several important issues regarding the markets for fixed income. now, as you look at the two-day chart of treasuries, first of all, 195 has been viewed as a pivot the last several sessions. we just popped above. but remember the big comp. it's friday. fridays are important. last friday was the record high close going back to april of 2002 for the 10. the day is still young, at least from the u.s. time slot standpoint. if we switch gears to the foreign exchange market, look at the euro versus the dollar. it doesn't seem to be gaining the sea legs after a dov set of comments by mario draghi,
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which we talked about at great length. if you open the chart up to early november, many are saying, hey, maybe this is the turn. if you look at it versus the euro/yen, the two-day chart looks similar. open it up to november, just consider this, you know, last week we were at 126.65 on the euro/yen. now we're barely above 124. have these markets turned. i can't tell you that. but it's the most popular pair of charts on the trading floor. also, bob was talking about the nikkei and its effect post-draghi, and some of the issues regarding europe. but remember, you know, you don't really need to look at many markets this morning. i saw the nikkei was down rather substantially. pretty much you can count on everybody else in europe and in the u.s. looking at positive equity movements. jim, back to you. >> thank you, rick. china trade date a bullish, playing a role in today's energy market. let's go to sharon epperson at the nymex. >> brent crude futures right now, we're looking like we're moving toward $120 a barrel.
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brent crude right now at the high of the session. nine-month high for brent crude. close to $119 a barrel. and it's rallied strongly in the session. of course, the china data on crude imports definitely very important. of course, as it is importing more oil, the world's second largest economy. this, of course, as we're looking at what's happening here in the u.s., where we're importing far less oil, because the production boon we're seeing in the united states, that is one of the reasons we're looking at this huge differential between the price of brent crude and what we're seeing here in the u.s., with sufficient oil prices just above $196 a barrel right now. and not even up $1 on the session. the real standout that the folks in the northeast are going to want to know about is heating oil. they're leading the charge with the gapes that we're seeing. why is that? 6% of the households in the united states use heating oil to heat their homes. 80% of those are in the northeast. of course, that's why nemo's coming. that's where we're getting this
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huge storm. we're likely to see for the ninth winter in a row, according to the energy administration, we could see heating oil prices higher than gasoline prices. and we know where those are going. >> all right. >> how the heck can we not switch to natural gas. con-ed 7,000 buildings that are on oil? that's crazy. >> it is. >> sharon epperson, thank you. there's a cost involved as well. >> yes, a cost. but if oil keeps going higher -- >> that'sue. coming up, nemo's impact on the airlines. chief operating officer of jetblue airways on how they're navigating this big winter storm. 72% in the past year. up 7% today. tim armstrong keeping momentum going. exclusive interview is straight ahead as we head to break. all stations come over to mission a for a final go.
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about 4,000 flights being canceled today as nemo bears down on the northeast. we have the latest on the situation at laguardia airport. good morning. >> good morning, carl. as you talk about cancellations, there's something like 2,800-plus cancellations nationwide. here at laguardia, they've got already some 234 cancellations. kind of the calm before the big storm, if you will. light, almost rain/snow outside in terms of precipitation. but that's in advance of what we expect this afternoon. so the airports have already been canceling flights. lots of flights have been shut down. people came in this morning trying to change their flights to get out before the storm. but it's calmed down a lot. behind me now not a whole lot of action. people are very, very calm about it. i think everybody got the memo, or the news, if you will, that the storm is coming. the other thing about this, that the airlines have waved those con sellations and those flight
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change fees to make it easier for passengers. so that's what it takes the sting out of the fact they're not able to carry through many passengers with the plans that they had for today. but again, in advance of all of that, the airlines have taken a very direct step, and that is, shutting down a lot of these flights before the big storm hits. carl? >> that is key, rehema. thank you so much for that. a lot of this morning, a lot of the stats were a couple thousand flights, but it's quickly been upped. >> quickly building. >> yes. >> amount of destruction in terms of planes stranded, it will take days potentially to work this all out. >> amr could be -- >> the root structure, when you put the two together, latin america -- >> it's going to be a powerhouse, no doubt about it. especially the latin american routes and -- that's why it's likely going that way. they seem to have agreed to a
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72% or so share, in terms of the creditors owning 72% of the equity. >> jim, you're leaving for vacation. and your birthday's coming up this weekend. >> on sunday, yes. i've waited until after the football season. >> in sort of the "six in sixty" mode, we'll do six cupcakes in 60 seconds. >> thank you very much. >> have a great one. >> you are the man. >> when we come back, jim will burn those off in ten seconds. you know and love "six in sixty," cramer will rattle them off when "squawk on the street" comes right back.
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a bit of a rally on our hands here, simon hobbs. what else is coming up? >> a first on cnbc interview with tim armstrong who will be here in the next hour of the program. we'll look how dangerous it is to invest in fast food now, with mcdonald's reporting, and also the latest on nemo.
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jetblue coo will join us live. we have the cupcakes. let's get the stock. nuance. >> the shortfall, people are upset about it. apple is sound. >> we mentioned the blizzard, activision blizzard. >> this hot game, one big game can make a big difference. >> hot. >> i mentioned this, because last night they're talking about chinese tourists, secular growth. he's got 100 hotels coming. cheap stock. >> riverbed next? >> it looks like a big disappointment. a lot of people not happy with this company. makes equipment for wide area networks. >> d.o.g. >> i've had it on for "mad money," he's retiring. people can say let's take a run at it. >> discover financial. >> this is a cheap stock. i talked yesterday maybe there's something about visa and mastercard, the cheapest of the
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three. care fusion, red hot, health care. and then tonight i've got a company called home streak. this is the hottest ipo of the last year. and they haven't said a thing. first on cnbc. >> you've got two minutes to chat here. as we approach 1516. what does this mean here? who has the ball and when? >> well, i think what this says is, go back to monday. we had a scare. we had europe come back on the radar screen. we have mario draghi talking on tuesday about the prospect saying to everyone, listen, the euro is too high. europe was down horribly at the beginning of the week. the last time i looked at europe, the eyes on america continues to be so much stronger, that it's a balancing act. don't forget spain or italy. but remember california and florida, back to being two fast growing states. >> the big question yesterday, we were down 120, 130, was it a big misdirection day? when we did rally in the
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afternoon-e. >> it did rally. don't forget, apple has been a major source of funds for a lot of stocks. apple is also a bellwether for many retail investors. it's been hammered. it's down by 12% in the last, oh, for a short period of time. but i would emphasize there is retail money coming in. bob pisani has a special next week. pay close attention. i think a lot of money is coming in through the etfs. etfs driving a lot of the bus here. >> interesting. we've seen nice inflows. we haven't seen as much outflow out of bonds. >> right. >> some people still looking for confirmation that that trade is actually happening. >> exactly true. i think america is a great place to invest. there are a lot of companies sell slow mobiles. the google piece, you can get a high quality growth company 15 times. that's extraordinary. that is the most reduced level
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i've seen for a great growth stock in a very long time. >> have a great weekend. >> thank you, partner. thank you very much. you're terrific. thank you so much. >> jim cramer tonight at 6:00 and 11:00. we'll keep an eye on the winter storm and the potential impact, include a live interview with the coo of jetblue. do not go away. our first full team gathering! i wanted to call on a few people. ashley, ashley marshall... here. since we're often all on the move, ashley suggested we use fedex office to hold packages for us. great job. [ applause ] thank you. and on a protocol note, i'd like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh i'm sorry guys. ah sometimes the caps lock gets stuck on my keyboard. hey do you wanna get a drink later? [ male announcer ] hold packages at any fedex office location.
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welcome back to "squawk on the street." we are about 30 seconds away from december wholesale inventories, and all of these december numbers like the better than expected trade balance which saw deficits shrinkage of about, what, close to 21%. all of these december numbers are going to impact potential revisions to gdp for the fourth quarter, which we received last week. and it was a paltry minus .1 of 1%. we'll watch this number very carefully. interest rates have moved up with stocks. wholesale inventories shrank .1 of 1%. sales were unchanged at a goose egg. we were expecting .4 on inventories. this is going to be very key as
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we factor in some of our potential revisions for the next look at fourth quarter gdp, which comes at the end of the month. here we get close, within two basis points of 2%. remember, we started out around 193, 194 today and closed last week at the highest yield close going back to april at 2.02. >> rick santelli, thank you. not too much reaction in terms of the major averages to that data. it is important to keep in mind, with these gains here, we're now positive for the week. definitely for the s&p 500. this is a new high, by the way, on the spx. up almost eight points. the nasdaq as you see there, outperforming of the major three indices. we're seeing very, very nice gains by large cap technology stocks. microsoft is up 1.4%, apple is up. and google hitting a new 52-week high in today's sthegs.
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>> we're watching winter storm nemo about to hit the east coast. more than two feet of snow expected in boston. many cities are telling residents, of course, don't travel, if you don't have to. airlines warn the blizzard could krip tl hundreds of flights, actually already 4,000 flights have been canceled. our road map goes like this. as nemo shuts down much of the northeast, jetblue's chief operating officer will join us live. >> and those golden arches don't seem quite so golden anybody. missed estimates for every region with the biggest decline out of asia. can the hamburger giant turn it around. aol's got profits. the company matching estimates for the fourth quarter while seeing a rise in revenue. the first in eight years. we'll sit down with tim armstrong on the back of earnings for a first on cnbc interview. a 16-year-old actress trying her happened at trading stocks.
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she says her return, well, quite good. we'll bring you the young lady behind fox on stocks a little bit later on in the program. >> by good, it was really good, right? >> i want to say it was more than 30%. she claims. >> and she's 16. >> yes. >> 60%. thank you, courtney. >> take that, david einhorn. meantime, more mcdonald's customers may be saying they don't want fries with that burger. sales around the world down 1.9%. andy, happy friday to you. >> thanks. good morning. >> stocks up almost a percentage point. how can that be, when asia-pacific and japan were so miserable? >> yeah, i think it really gets to the u.s. number, where they did eke out a positive comp in the u.s. and i think that, you know, for the meantime, allows people to kind of breathe a little bit of a sigh of relief. >> yeah.
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in december, the u.s. was also the silver lining, if there was one. this morning, cramer suggested maybe they've actually got this dollar menu pricing right. at least in the states. is that what you see? >> well, they certainly have the power and the brand to buy some sales, as we're seeing out there. i think, though, that that comes with the margin risk. they certainly have done a lot to reemphasize the dollar menu and introduce the new product, the grilled onion cheddar burger on the $1 menu. maintaining traffic, not driving huge numbers. but again, we think that there is a margin risk in shipping those customers down to the dollar menu item. >> andy, is it your sense that they are losing share at all to some of their competitors, like a burger king or wendy's? there's a price war going on in qsr? >> we clearly believe that to have been the case in the back half of '12, and continuing here
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in the early part of '13. it's just feels like some of the other national competitors as well as regional players in quick service that follow the mcdonald's playbook that drives such impressive results at mcdonald's, i think they have newer stuff and they're doing it a little bit differently, while mcdonald's is running out of arrows in their quiver, so to speak. >> your price target is $83. >> we do have the lowest estimates on the street for fiscal '13. the current year. we believe these same-store sales will lead to margin pressure -- >> but i just want to highlight that. this is a very dangerous stock to be in, as far as you're concerned. we trade above $95. do you think we could go to $83, what, by the end of the year? >> that's correct. that's a year-end price target.
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we think that given the next couple of months are likely to continue to be negative, comp numbers not only globally, but in the u.s. as well, given the tough comparisons they have coming up. we think, yeah, street numbers will come down and the multiple compressed more of a mid-teens multiple which is how we arrive at our low to mid-80s price target. >> let me ask you more broadly about what is happening with fast food in general. "the new york times" has an article today about how the rise in payroll taxes in particular hitting those on lower incomes. one of your rivals, one of your colleagues, if you like, over at citi, he's actually suggesting that the same-store sales could be challenging moving forward. he's highlighting that he thinks burger king, for example, could be running 200, 300 basis points below the estimate in december flat sales. how bad could it get here? how dangerous is this sector?
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because of what is happening to low-income americans? >> it's a really good question. obviously this is just unfolding. but we have picked up, you know, very choppy and negative data in the latter part of january as consumers were trying to figure out kind of what was left in their pockets, or their bank account at the end of the month, and the end of the pay cycle. i think we did see a step down, and we've picked that up from operators, industry data. that's really the first impact, obviously, that we saw this year. there's also some changes in e-filing and some weather clearly, as you guys are looking at realtime, that always has an impact on the data points. but i do think it's a choppy, challenging environment out there. even for quick service. quick service does happen to hang in there a little better than the higher priced categories like full-service casual dining, for example.
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>> andy, thanks a lot. >> thank you. >> talking mcdonald's over at jefferys. >> in the northeast, the winter storm nemo, which is bowling towards us. jackie dean gel lis has the latest states on the storm. >> good morning, simon. let me just give you an update outside here first. the snow started coming down around 7:00 a.m. three hours later, we've got a wintry mix on our hands. but things actually aren't so bad. people commuting to and from work at this point. also checking out some of the other travel statistics out there. according to flight aware.com, about 4,125 flights have been suspended between yesterday, today, and also tomorrow, in preparation for winter storm nemo. which at this point is looking to potentially give us two feet of snow on parts of the northeast. and also, 12 inches of snow in new york city, where we are under a blizzard warning.
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meantime, amtrak is also canceling its northeast service as of this afternoon. mayor bloomberg has come out this morning saying that he hopes that these forecasts are an exaggeration, but at the same time that the city is prepared. and the good news is that it comes on a weekend, so we do have the potential to see less traffic patterns. and also to see the crews out there being able to clean things up. last, but not least, i want to talk about the economic impact of this. a lot of economists out there saying it's a typical storm. we may see disruptions and closures tomorrow, but people bulked up ahead, they can go shopping the day after. retail probably not going to see too much of an impact. >> thank you, jackie. stay warm. >> let's bring in the weather channel's mike seidel near revere beach, massachusetts. mike, what's the latest? >> well, we can see one of those jumbo jets coming right off logan's runways. so they're still getting out of here. that won't last much longer,
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because they'll shut down operations later this afternoon. the blizzard out here on the coast is higher than average tides, extensive beach erosion and coastal flooding. here at revere beach we've got a seawall, we're expecting a surge of about two feet. we'll be okay with this coastal property. go down south of here, we've got these waterfront communities, these homes right on the sand. those people are heading to higher ground. a lot of these are summer homes. those homes are going to get hit. they'll have higher surge values and we've have 20, 25-foot waves down that way. up here we're protected by a jetty, and by land sticking out northeast of boston. it's going to be a wild ride out here on the coast, with these hurricane-force wind gusts, expect power outages, not only here, but inland. with that wind and that snowfall amount forecast of over two feet, expect drifts out here on the coast as much as 6 to 10 feet. simon, it is going to be just some wild stuff out here tonight and tomorrow. maybe even some thunder snow thrown in for good measure by
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later tonight. >> mike, are you going to stay there through the whole thing reporting for weather channel? >> we are, simon. we're going to ride out right here, as nemo takes aim at new england. we're not going to be right here, because of the dangerous location. we're going to be a little bit across the street. we're going to get protection from our satellite truck and our camera. but we'll be broadcasting here through tonight, to about noon tomorrow. then things will be easing off as everybody digs out. i'll have the pictures for you on the weather channel. >> i know for sure you'll be in your element all the way through. mike, thank you very much. ahead on the program, aol matching the street's estimates for the fourth quarter. in fact, growing its revenue for the first time in eight years. we'll be joined by aol chairman and ceo tim armstrong. the northeast bracing for a major winter storm. nearly 4,000 flights are already grounded. forecasters warning this storm
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superior service, best selection, lowest price, guaranteed. ♪ sleep train ♪ your ticket to a better night's sleep ♪ aol reporting the best quarterly revenue growth in eight years due to strong search in advertising sales. aol chairman and ceo, tim, always great to see you. >> melissa, thanks for having me on. >> your stock has had a monster run over the past year, up about
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72%. tim, i'm wondering in terms of your outlook for advertising and pricing, what do you see in the next couple quarters? >> we see, first of all, let me take a big step back. it's our three-year anniversary as reporting as a public company. we're announcing growth for the first time since we spun out of time warner. most importantly, the advertising revenue, you know, tremendous double digit growth up 13%. we're excited about the future in advertising. and across our properties, because there's a tailwind of consumers still adopting digital services. the advertisers need to follow. we've worked really hard to position ourselves in the middle of that disruption curve. you're seeing that in our results today. >> in terms of the street, obviously, as i mentioned, your stock has nice run. if there is one reservation that investors and analysts have, is the dial-up services contributes to the vast part of your
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profitability. that's declined. what can you tell us about that, and also, changing your mix to a higher growth area? >> yes, our job at aol is to move the company to the most noncommoditized spaces as we can. we've focused on our most loyal customers. you've seen the improvement we've been able to see in that business. that coupled with our move into some of the hottest properties in the internet space will allow us to essentially migrate the people and the changes happening in the membership group into the future of the internet. i think as an investor, investors have expected the membership group to go down. they've expected us to innovate on the other side of the business. today's results actual itly show the perfect marriage of those two things. i think investors should be pleased. aol beat the major indexes over the last three years. it's been a great investment. we rushed $1.5 billion to investors, about 50% of the market cap of the company in the last three years. we're just getting started. >> they are pleased, tim, as
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evidenced by the stock's move today in terms of your progress on membership. at the same time they want to see you move the needle away from that as a driver of your profitability. can you give us a time frame as to when we can see that happening? are there targets there? what businesses are going to pick up the slack there, for membership? >> that's the key question. that's what we're focused on. we just got off the earnings call, and what we told investors is, our three segment areas are profitable and we want to drive toward higher margins, higher profits. we put big investments in those businesses, and as those investments burn off and we're in the middle of that disruption curve, you will see the margins widen, and us grow overall as a company, but also within the margin structure within the segment. investors have been patient with, rode with us through one of the biggest turn-arounds, now it's up to us to make the turn-around into growing revenue, growing margin business, which we're intent on doing.
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>> tim, there is a lot of talk about facebook and its power of taking a lot of advertising, particularly if it were to start its own ad network. they have an exchange. do you share a concern that some have that should facebook go down that road, it would impact aol? >> we're big partners with facebook both on the consumer and ad side. we're integrating advertising.com into the exchange right now. we view facebook as a opportunity, and partner. the second piece i would just say is, the ad network space is getting a lot of attention and noise right now. i think if you as an investor take a step back, a couple years, and look at what we actually did is refocus on that, we actually have probably the second largest asset in that space right now. so more people getting into that marketplace, because more ad dollars are coming in overall, which will lift all boats. we feel really good about our investment, and really good about our partnerships. we're one of the only companies in the industry that partner
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with almost everyone in silicon valley. and i think the ad business will continue to do that. >> when you say you'll position yourself in the middle of the disruption curve, could you explain to our viewers what that means? >> it's really built on two things. one is, as consumers move more to digital services, to mobile phones, tablets, desktop and really the plasma connection that's happening now, that's creating a giant tailwind where advertisers need to get inside of that disruption curve, where consumers are changing their products and service mix of information going digital. we're actually sitting right behind the consumer changes with our ad systems and our content properties as well. the other thing that i think you'll see is we went through a really difficult turn-around. most of the major companies in the content and advertising spaces haven't even hit that turn-around yet in disruption. so we feel very good about the hard work we've done in the last three years to get in front of it. we think companies will have to follow us through that work. and that's really difficult work. so we feel well positioned with
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consumers and advertisers. and also, see an industry that has to make some pretty dramatic changes, which we've already made. >> tim, in the past few years, you've shrunk the number of shares outstanding dramatically through share buybacks. you've been very aggressive, and also announced the authorization of $100,000 more in repurchases. that doesn't necessarily mean the company will actually repurchase those shares. but will you be as aggressive in buying back shares? >> that's a huge opportunity for investors has been the results of the company. we've had a dual track strategy of improving results and offering higher values. the outstanding equities down about 30% from three years ago. later today, we're going to put out a filing, i just went over a 5% holding myself personally, so if you take me as a case study, you know, my investment in aol personally, just like all the other investors, has benefited from the operational improvements. but the growth, we announced $100 million buyback today because we feel strongly that
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is still a great investment. the investments we made in the last three years have been net accretive to shareholders. that's really the track we want to do. we'll be operationally friendly and shareholder friendly. >> tim, on that note, as you look more broadly through the industry, there's obviously moves by apple to move back, dell is using its cash pile to take it private. what view do you take on the cash discipline of some of your competitors? >> the cash discipline overall as a company, every company has to make their own decisions about it, you have to carefully manage what the expectations are around what cash you're holding, what the return is for shareholders, versus either reinvesting it or distributing it. you've seen us essentially give back three times the amount of cash we currently have, giving back $1.5 billion so far. so you see us as a very shareholder-friendly company. if we don't have better things to do with cash, we'll do things like the announcement on the
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$100 million buyback. but look, we've used our cash carefully and we'll continue to do that. we're a great storage of capital, as fred reynolds, our lead director likes to say, when we have our board meetings, we're a great operation, but also a great storer of capital. >> tim, thank you for your time. tim armstrong, the ceo of aol. >> thank you. an actress, the wonder team behind fox on stocks joins us live later on. senator bloomenthal talking storm preps and sequestration as well. what are you doing? work? work. cdw configured these lenovo thinkpad ultrabooks with intel core i7 processors. so, we can work anywhere. anywhere? sure - on the beach, in the woods, at the lake.
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online gambling may soon become legal in new jersey. brian shactman has more on how that might change the state. >> yeah, basically, christie said if it had a few changes, he would support it. christie wants a ten-year trial period, so it can be reviewed. he also wants internet gambling
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revenues packed at a 15% rate as opposed to the currently proposed 10%. he wanted more money devoted to helping those with addictions. if the amendments are made and the legislation is passed and both things are expected, new jersey becomes the third state to move forward with legal online gambling. nevada, which is only poker, and delaware, are the others. all three probably should start the practice later in the year. in a statement to the state assembly, christie wrote, since the beginning of my administration i have stressed the importance of reversing the trend of economic contraction in atlantic city. atlantic city is the key word here. according to wells fargo, this could mean up to $850 million in a year in revenue. right now, the bill would be just for people living in the state to be able to gamble online. other states with legal online gambling could utilize the new jersey site. the more states that do this, the bigger the business could become for new jersey.
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atlantic city could use the boost. revenue down about 40% in just the last seven years. there is a little bit of concern about some lost tourism, but governor christie basically said, the cost benefit analysis just makes sense to get in, and get in first. coming up, we'll talk about the possible implications with professional sports. all leagues are against this. we'll chime in on what they have to say about it. >> internet gambling is already legal in europe. there are stocks that are already moving up in london on the basis they'll be able to capitalize on this. >> that is definitely true. thank you, simon. >> there is a mover in the gaining space. let's send it over to josh lipton at headquarters. >> well, here is one gaming stock actually on the move this morning. international game technology, enjoying a pop. analysts at arges have a price
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target of $20. they note the company's better than expected earnings over the past two quarters, and the fact that the current price, the stock looks cheap, they say, and doesn't reflect prospects for recovery in sales and gaming equipment. igt up 20% year-to-date. >> josh, thanks so much for that. becky quick escaping the oncoming winter storm here, and hiding out in pebble beach, california. yeah, she sat down with a number of very interesting people in the world of business and politics. notab notably, clint eastwood. i was hoping you would have one extra chair on set for that interview. >> no extra chairs this time around, carl. clint eastwood, dirty harry, he always speaks his mind, says exactly what he's thinking. over the last year or so he has watched his political profile rise on the scene, after a year ago, just over a year ago, we watched him with that memorable super bowl halftime commercial that got so many people so angry.
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that was followed up with an even more memorable appearance at the republican national convention with, you're right, the chair that was out there. we got the chaps to catch up with clint eastwood yesterday. he talked a little bit about some of the biggest problems he sees facing the nation right now, including the budget deficit. and he talked about his frustration that the simpson-bowles plan has never been acted on. >> they were just dismissed and that was the end of it. that's kind of -- it's almost like they don't give a damn. so if they don't give a damn, why do they expect anybody else to. obvious obviously, you know, people get complacent, and then things really go bad. >> of course, that super bowl appearance, he did talk an awful lot about what prompted that. and he said on the streets now, he hears from people all the time, about 50% of the people, they loved it, if they happened to be republican. the other 50% if they were democrat hate it.
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he said that's okay by him. he's got a pretty thick skin from all of his acting work, and the critiques he's taken over the years. asked if it made him less likely, or more reluctant to come out and speak his mind, he said not at all. guys, by the way, we talked to him a little bit about the chair incident and how he came up with that entire inspiration behind it. he told me off-camera that the way that that came about is he had been in his hotel room ahead of time sitting and listening. on the radio a song came on, a kneel dimond song called, i am, i said. in it there's a lyric where he said, i am, i said, to no one there, and no one heard it all, not even the chair. he said that kind of got things going for him. that's what made him think about it. when he walked out on the stage, he just asked them to put a chair up on the set. you know what happened from there. >> you put up the graphic of that lyric this morning, and i've been singing it ever since. you've got a big storm coming here.
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i guess you'll have to spend a week in pebble, i'm sorry. >> if i must. it's raining here. we didn't escape all the weather here. but i'll take the rain any day of the week versus the snow. not a bad assignment. >> safe travels back home to you and the family. >> thanks, guys. see you later. perhaps 16-year-old rachel fox can make a living playing the stock market if acting doesn't work out. she'll joining us a little bit later on. will it be 12 inches of snow or maybe three feet? a blizzard is brewing and the snowfall predictions are all over the map. a live update right after this. e to make their money do more. (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade.
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you remember the fourth quarter neg different gdp last week caused all that concern. we turn to steve liesman for more on this. is this about the trade gap? >> the trade gap. get your pencil out, stick with me. we'll do the math, and i'll tell you why it all matters. it's still early days when at the moment it looks like that negative 0.1 in the fourth quarter probably now on the plus side now. the trade deficit, estimated when they figure the fourth quarter one, came in -- the consensus was supposed to be a negative 45.5. well, it was a little bit more positive. it was minus 38.5. it was a huge narrowing of the trade deficit right there. certainly compared to the november trade at 48.6.
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what you see here, exports were up 2.1%. november exports were up 1%. december, down 2.7 on imports and up 3.7 on november imports. unfortunately the wholesale numbers came in worse than expected. maybe not so surprising. fewer stuff coming in through the ports, so fewer stuff on the shelves. autos down 3.8. that took off a little bit. bottom line, ben did some math for me, calculates that the negative .1 was probably more like positive 0.5. not huge. not amazing. but the thing is, it's closer to a 2% economy. he factored in the 3.1% from the third quarter. that's really the key. we wanted to make sure this
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economy wasn't really weakening. which is how the market, by the way, played the fourth quarter number. what this is, guys, is really confirmation of how the market looked through the government number here. it's still a 1.75%, 2% economy. more stuff to come, though, in terms of revisions that we'll get more data next week, melissa. >> steve liesman, thank you. we're keeping a close eye on winter storm nemo. how are the home supply stores gearing up ahead of the storm? mary thompson is at home depot in new jersey. >> hey there, melissa. there's been a steady stream of customers here in hackensack, new jersey, at home depot, ahead of the storm that is expected to hit tonight, home depot began preparing for this storm a week and a half ago, to get supplies to the areas that are expected to be impacted the most. snow blowers, shovels and salt, despite all the prep, is in
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short supply. here's the district operations manager. >> we cannot keep it in the store. it's selling dramatically quickly. >> when is the last time you had a delivery? >> it came in last night and sold within about 20 minutes. >> ask retailers like home depot, and they'll tell you every storm is different. he said what's different about nemo is there is more demand for storm related goods. he said customers are much more concerned about being ready. that readiness goes beyond items for snow removal to include those that keep the lights and heat on. >> i guess with sandy, we were without power for ten days. we didn't have enough generators. so this gives us a peace of mind. >> this looks like it will be real. all i think about is my power's going to go out. >> that peace of mind coming in the form of a generator. generators one of the top three items on customers' lists coming
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in this week. that's unusual for a blizzard. they said generator demand picks up after a hurricane. but again, this time is different. as it stands right now, this store sold about 50 generators. there are no generators left. there's also no salt left. there could be delays in delivering more because trucks are being diverted. they're out of gas canisters also. this is the last snow blower in the store. again, consumers are very concerned and they are getting ready for nemo. simon, back to you. >> i think you should probably buy it just in case, mary. >> i don't know if i could carry it up the 21 stories to my apartment. i don't know if it's practical for me. >> not very useful in new york city, simon. >> the number of flights that are being canceled continues to escalate. we're now at 4,000. let's get to the cutting edge of people making those decisions and bring in the chief operating officer for jetblue, rob maruster, joining us on the cnbc
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newsline. rob, for an airline headquartered on the east coast at jfk, this is quite tough for you. >> well, we've got about 80% of our operations centered around the northeast. boston and the new york area. so, yes, we're very near and dear to what's happening here in the northeast, right across the river from you guys. >> how many flights have you canceled? >> we've canceled 640 flights so far. it could go up or down, depending on how much the wind and blizzard conditions continue into tomorrow. we'll be shutting down the new york area here at about 5:00 this afternoon, with plans to resume about noon tomorrow. boston we'll be shutting down about 3:00 today with plans to resume about 6:00 p.m. tomorrow evening. but it's going to be a little heavier up in the boston area. >> how difficult is it -- i mean, is it now obvious to you when to cancel flights, or is there a gray area? i'm thinking particularly, of course, of legend has it that two years ago, you probably didn't cancel as many flights in that crisis as you should have
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done and there was a lot of customer unhappiness. is it a movable feast, the decisions that you make? >> simon, we view mother nature as being part of our team here. sometimes she behaves well and sometimes she doesn't behave well. if she's not going to behave well, we're going to let her win. our decision day was yesterday, on thursday. we made the decision yesterday afternoon to take out our flights this evening, into tomorrow. and we'll have to adjust accordingly, based upon what conditions are after the storm. particularly with runway conditions, and roadways and public transport. we're a little bit of a wait-and-see after the storm hits. but i think lessons learned are that being proactive, both from a customer and operational standpoint really helps out and makes a lot of sense. >> rob, you know, the difference between a snowstorm and hurricane is there are aftereffects of a snowstorm, there's still snow removal to be done. compared to sandy, because sandy was a $45 million hit to
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revenues last quarter, does this look like it will be bigger? >> you know, melissa, it's too early to tell. my sense of this storm is, no, it's not as i impactful. i think what happened with sandy is the entire region in the northeast didn't have power for up to ten days. so people couldn't go online and buy tickets. the difference with this one is my hope after everyone buys all their shovels and snow blowers at home depot, they'll want to buy tickets to the caribbean after this. we're going to be moving a lot of aircraft out of boston later today. and new york will have a minimal footprint of aircraft, so we can start operating tomorrow. but really, simon, we need to get them out of there, because you've got to move the snow. if you've got airplanes laying around the airport, it makes it difficult for places like mass port and port authority of new york and new jersey to get the infrastructure cleaned up so we can operate. >> rob, just before we let you
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go, there's a lot of talk we're getting close to an american airlines, an amr deal with u.s. airways. this is a different deal if it possibly kocomes in over the weekend. expanding networks rather than cutting costs. what will it mean for an airline like you? >> i think our plan all along, and i know through dave barger and the rest of our team, we feel good about our long-term prospects. in the context of previous mergers and acquisitions in airline combinations we've seen out there, it's tended to come with rational capacity reductions overall. and to a carrier like jetblue that's 5% of the u.s. market share, that presents some opportunities for us. so we're on the outside looking in, waiting and seeing. but by all accounts, our previous experience has been that rationalization of capacity happens when mergers and acquisitions occur. >> some believe we're entering a golden age for investors, where you have this discipline on capacity, and the airlines could really push margins forward.
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do you believe that? >> well, i think historically, you know, since the first commercial flight in 1914, through this year, we have not been an industry that's returned its cost to capital. i'll take a silver age before i take a golden age. but i'm certainly hopeful. >> hey, good luck with the next 24 hours, rob. on behalf of your customers, if no one else. >> thanks so much, guys. >> the chief operating officer of jetblue. a mover in the credit ratings space. josh? >> well, keep your eye on moody's, which is falling this morning. the credit rating agency said quarterly profit jumped 66%. forecast 2013 earnings above the street's estimates. moody's has been under a lot of pressure since the u.s. government launched that civil suit against rival s&p. reuters reporting that the justice department and some states are discussing suing moody's as well. there are also reports that new york's attorney general has formally requested information from moody's. so lots of worries here about legal risk.
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moody's conference call starts in just about an hour. carl, back to you. >> thanks so much, josh. senator richard blumenthal bracing for storms in his home state of connecticut, maybe on capitol hill as well. however, that's a different kind of storm. he'll join us later on to talk about nemo and the sequester. plus, she's 16, she's an actress, and she's a stock trader. the details on the phenom behind fox on stocks is next. i'm glad we got cdw and cisco to design our data center. yeah, the cisco ucsc series server, with the intel xeon processors, help us scale smoothly, like a perfect golf swing. how was it before? clunky and full of unnecessary impediments. like charles' swing. i heard that. all stations come over to mithis is for real this time. step seven point two one two.
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she played felicity huffman's daughters in "desperate housewives," was in dream house, now she has a new title to add to her resume, a stock trader. the 16-year-old is giving her advice on her blog. rachel fox joins us now from los angeles. hey, rachel, great to see you. >> thank you. thank you for having me.
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>> you made 338 trades in 2012. with a 30% return on the year. not too bad. compared to hedge fund managers out there. how did you get started? >> thank you. you know, my mom was in finance, and my dad is just a genius with numbers. they both really understand the stock market. they thought it was extremely important for me to understand the basics even. and when they explained it to me, i kind of fell in love with the idea and the concept of being able to just buy something, have it go up, or have it go down, depending on which way you bet it and have it make you money. i thought, oh, my gosh, that's amazing, and so easy, i have to do this. i learned now that it's definitely not that easy. but i think it's an awesome concept and i started doing it, and i got addicted. i love it. i could not go days without it. it's wonderful. >> so you are a true day trader, at the end of every day you go
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home fully in cash, correct? how do you choose stocks to bet during the course of the day? >> for the most part, i am a day trader. some days i will hold overnight. i do a couple of swing trades or week trades. and how i pick my stocks, i'll just look at a bunch of different things. i usually go on technicals, what is overbought and oversold. i try to look at stocks that are less affected by news. i mean, i don't necessarily trade a stock like apple quite as much, because it is so -- people are always talking about it. someone's always speculating on it. it's always being swayed by someone's opinion or some piece of news. i try to really trade stocks that are more technically affected. stocks like hbc, or flp, oil stocks. i mean, stocks like tiffany's, or nov. i love stocks like that, if they're overbought, they'll
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probably get corrected. >> what's your favorite stock at the moment, rachel? >> my favorite stock? you know, i just had a great short sell the other day on tiffany's, so i love that one. it's a favorite right now. and also, you know, i really -- i'm looking at facebook, just from a day trading perspective. it's relatively cheap. relatively low priced. its volatility is incredible. and it is -- it has a high volume in trading. it's a very fun stuck to day trade. and facebook is difficult, because it's something that a that a lot of people talk about a lot. and i think it's very -- it can be affected by people's speculations, opinions. it is one of those stocks which makes it difficult. but it's a perfect day trading stocks. that's one of my favorites right now. >> rachel, not to embarrass you but we always love asking people what their most painful trade was and the lesson they got as a result of that. have you gotten caught in a
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squeeze or have you bet heavily and it went nowhere? >> it was the first trade i ever made. it was bittersweet. it was what kick-started me into trading. it was tough. it was a stock tip from someone. my family and i were at a thanksgiving party. and a guy there told me, you have to invest in this stock, it's amazing, it's a $2 stock and it's going to go to $10. and i was like, i have to do this. sounds amazing. it was a stock tip. and the stock right now is trading for about a quarter of a penny. it went from $2 -- i know, yeah. it was crazy. i lost my shirt for sure. but it was my first trade. it got me into it and i learned never, ever take a stock tip because only you can enter the trade and know exactly when to exit it. you have to really just trade on your own instincts and not just be like, oh, this person says this is great, let me just go for it and do it. it's so nice and easy.
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it feels so cushy, they're giving me this advice, it must be right. but it's never that easy. >> trust me, going to $10 is something you don't want to follow through on. ramp rachel, good luck with everything. >> thank you so much. >> i love the reaction on twitter right now. when we come back, what do fed policy and the surges in petroleum and supports have to do. santelli has a theory. [ male announcer ] at his current pace,
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welcome back to "squawk on the street." this is the final rendition, friday, for "santelli exchange." yesterday steve liesman did a wonderful, long interview with charles evans, head of the chicago fed. and in the past, i've done many spots on the difference between qualitative and quantitative. when they were talking about the new issue of the 6.5% hurdle with regard to quantitative easing, steve was really trying to press -- and i give him major credit for that -- exactly how to interpret how that will play out to the continuation or lack of continuation of quantitative
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easing based on a drop in the unemployment rate. and here's his answer -- >> it's qualitative. i tend to favor quantitative me markers but i think it's qualitative. >> i'm not trying to pick on mr. evans. but here's the point. many have talked about that qualitative is basically subjective. many are questioning how much horsepower is affected by these programs and actually lowering the unemployment rate because the recovery is slow. it's just a matter of time before the spite programs on the federal level or the fiscal or monetary level are going to improve. another thing happened today, that was we saw a huge jump, a historic jump in petroleum exhor exports. remember when i converted a regular engine and a ford f-150 to natural gas? this is part of that story. we need to embrace this. this is also happening despite
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all the rhetoric, kind of the ingenuity of america. we need to export more energy. there is one issue, though. and the issue is, according to zeroheads, the numbers don't really match. if you look at the exports/imports between china and the u.s., there seems to be a rather large discrepancy. either china is exaggerating their exports or the u.s. is exaggerating their imports. just something to think about. back to you, melissa lee. >> thank you, rick santelli. still ahead, linkedin continue on its run of pleasant upside guidance. how much longer can it keep the momentum going? back in two. what are you doing? work? work. cdw configured these lenovo thinkpad ultrabooks with intel core i7 processors. so, we can work anywhere. anywhere? sure - on the beach, in the woods, at the lake.
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welcome to hour three of "squawk on the street." here's what's happening so far. >> businesses, general economic activity is a bit slow. we're hoping 2013 can produce a little tailwind from the economy as opposed to headwind. >> it's not so much that people don't come back. it's coming back to a mobile device. and that's tracked differently. and it doesn't have the screen space to do effective
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monetization. >> that's for everybody. >> terrible problem for everybody. >> i actually drill down on the idea the reason the stock's not down, maybe they figured out the value in the u.s. and the u.s. had been a big problem. then you can blow it out overseas when you include the taint of china. i'm questioning why the stock isn't down a dollar. i think it has to be the u.s. there was an ad business up 60%? this company at $20 billion is a company that facebook should buy. >> you literally dropped the mike on that one, right? cramer out. >> here we go. opening bell. >> they just have newer stuff and they're doing it a little bit differently. mcdonald's is running out of arrows in their quiver, so to speak. >> wells beat the major indexes over the last three years, it's been a great investment. we've returned $1.5 billion to investors, about 50% of the market cap of the company in the last three years. we're just getting started.
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good friday morning. we are live here at post 9 at the new york stock exchange. let's get a check on the markets as we head into a blustery weekend here in the northeast. the dow is about eight points away from going positive for the week. need to close at 14,900 to make this the sixth most positive week of the year. the nasdaq is up 28 at 3,193. mcdonald reporting global same-store sales dropping nearly 2%. sales in the u.s. were up .9%, beating analyst estimates. and shares of coinstar falling after the operator of redbox dvd kiosks gives a disappointing first-quarter forecast. the company will be impacted by fewer new releases on the schedule and investments in the streaming service.
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snowstorm nemo is threatening to dump as much as three feet of snow in some areas. we'll tell you how to weather the storm. linkedin trading at new highs. find out what the company is doing right and if there's still time to make money in the stock. business roundtable president, former governor of michigan, john engler, joins us to weigh in on debt, the sequester and the future of economic growth. and the start-up that survived the recession and is now part of an elite group of private companies valued at more than $1 billion. the ceo of evernote will tell us the secret to his company's success. we'll start with linkedin. the stock trading at all-time highs, reporting fourth-quarter earnings. 81% increase in revenue. crediting the success to their talent solutions business. tom white is an analyst and can help us break it down. tom, good morning. >> good morning. >> seeing a dramatic move in the stock this morning. is this deserved? >> yeah, i think so.
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i think the main takeaway from the quarter is linkedin is having a lot of success, generating incremental engagement from its investors. they launched three huge products in the fourth quarter. they're finding ways to monetize them with advertisers. >> we made some comments this morning about their international expertise, at this point. it's not just an opportunity. they seem to have figured out at least some short-term keys to mobile. is this going to turn into something we talk about on the acquisition space or are they going to motor under their own power? >> well, when you're thinking about potential acquirers of linkedin, i think it's an interesting list to look at. there are not a lot of obvious acquirers. i think this is a company that's going to continue to execute on its plan. you mentioned international. linkedin has over 64% of its 200 million members currently in international markets. revenues account for only 30% or
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so of that, international coming from revenues. huge opportunity for them to monetize. they've invested heavily in a salesforce last year. >> talk about margins. they gave some guidance which you think is probably a little conservative, at least on the margin front. and you say if execution continues, we struggle to see how margin expansion cannot approach or possibly exceed 2012 levels. where are we on the ride that we sometimes take with these companies where margins get fat and then make a u-turn? >> well, linkedin is going to continue to invest. i think all large successful e need to keep investing in s order to stay relevant and competitive. that said, we see a lot of tailwinds to linkedin's business particularly on the revenue line. this user engagement is propelling and reaccelerating
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their largest high revenue streams. we see expense comps in 2013. we think the company is being conservative in the guidance. and we think that ebitda margins can expand to 2013 much like they did in 2012. >> you talk about some new member products to come. is this sort of -- we often in the mobile space -- you look at a zynga, it's the pivot points around new launches, new products, new games. is it going to be the same dynamic here? are we going to be on the lookout for certain new member products in a big way? >> it's hard to say whether or not any of the new products that we see in 2013 will be sort of as impactful as the ones that they launched in the fourth quarter. in the fourth quarter you had stuff like a new profile page, the influencer's product endorsements. in 2013, i think you'll see new products around the theme of content, user sharing more content, a deeper integration with slide share. i don't know that they will necessarily be impactful. but in total, we think new
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products are going to help bring new linkedin members back. >> finally, tom, i'm not sure if you lump this into some of the momentum plays that we've seen in the past 12 months. but a lot of times when those turn, it can be severe and damaging. would you lump it in with that group? is it attracting big, fast momentum money that could leave in a hurry if something went wrong? >> no. i don't know that i would group it into that category. obviously it's tough to -- emotionally difficult to chase the stock on a day like today. but we continue to see upside to this name. we think it can drift higher over the course of this year. the company's generally referred to as a social network. but the important thing to remember is its largest and fastest growing business is a talent solutions business which is -- they have huge competitive moats there. they've built a better mousetrap that allows their employees to
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find talent and match opportunity. we don't really consider it a typical internet high-flyers trading more on sizzle than real substance. >> i do know some head-hunters whose heads are spinning based on what linkedin's done to their business model. tom, appreciate it. >> thank you. >> tom white on linkedin. let's move on to winter storm nemo. it could dump a foot of snow in new york. more than two feet in new england and boston. eric fisher is in boston with the latest on the situation there. good morning. >> reporter: good morning. just starting to see the flakes hit the ground here in boston. if we look across the common here, a beautiful scene for now. when we got here, it was all brown and green, shades of what's been a quiet winter in boston. we suspect by tomorrow morning, you won't be looking across that park, the wind will be blowing and drifting the snow around. could see over two feet of snow in boston.
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there have been only four storms in history in boston that you have seen two feet or more of snow. we have the yardstick to measure the snow out here. by tomorrow, we may be up to here. that's going to be a big project for the city, for the region. really it's shutdown time across parts of new england. the governor of massachusetts has asked everyone to get off the roads by noontime today. mass transit shuts down at 3:30 here in boston this avrn. we've had around 3,000 flights canceled here and to the northeast because of winter storm nemo. the saving grace is it's friday. people are going home. we have two days to clean up before the monday morning commute. >> thanks so much, eric. connecticut expected to be one of the hardest-hit areas by winter storm nemo. when we come back, we'll talk to
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senator richard blumenthal. but first, santelli is talking to business roundtable ceo john engler a little bit later on, right, rick? >> absolutely. three-time governor and head of the roundtable. i believe he took over in early 2011. we're going to talk to him about how the business community, especially small businesses, are dealing with issues like obama care and potentially some changes based on the sequester, taxes, the whole gamut. you want to be there. when? let's see, how about bottom of the hour? generate income? with fidelity's new options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
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retail sector trading higher today after yesterday's same-store sales numbers. one company struggling to ride that wave, though, radio shack naming a new ceo. josh lipton has more. >> radio shack heading higher this morning. the company's named walgreens executive as its new chief executive. the hope is his marketing experience can give radio shack a lift. the retailer faces a lot of tough competition from rivals like best buy and amazon. the stock is down about 55% in the past 12 months. the not everybody is a believer, though. ubs argues that radioshack is still a sell saying the new ceo lacks direct experience, they say, within consumer electronics. but radioshack enjoying a pop here, up about 5%. carl, back to you. >> josh, thanks so much. the connecticut governor
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will be declaring a state of emergency because of the blizzard headed to the northeast. we're joined this morning by connecticut senior senator richard blumenthal. good morning. >> good morning. >> state of emergency, looks like the roads are going to be subject to closure beginning in 45 minutes essentially. we all remember how the utilities got hammered during sandy. i wonder how you think this is going to compare to that? >> i'm very much hoping they will do a better job than they did during sandy which was a better job than they'd done during the previous storm. but they still have to prove that they can really meet this test. we're going to be watching very closely, not only for how they perform but how quickly they restore service and the kinds of costs that we see to our business community as a result of any outages and stoppages in power. so they still have to perform better than they did last time. >> obviously it hasn't been very long since sandy. just rebounding from that has
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taken a lot of effort. but have you seen hard evidence of lessons they've learned or methods they've changed as a result of that experience? >> they've certainly reached out to other states for crews that may be available to repair and restore power. better than they did during the storms last year. but the point is, they have to have those crews on the ground, boots on the ground are very, very important. and being prepared, which hopefully they have done and are doing, is the main task ahead. having those repair crews out there and if necessary, recruiting them and enlisting them from other states, particularly to our south, that will not have this kind of massive blizzard. >> yeah. here in new york state, one last question on the storm, there are still lingering questions about how utilities should be regulated, specifically on long island, where the response
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arguably was just sort of miserable. do there need to be longlasting structural changes in the way these companies are supervised or not? >> i think that the entire structure of oversight and scrutiny and regulation has to be reviewed top to bottom. you know, the federal energy regulatory commission combined with the i.s.o., the structural means of regulating transmission that applies to connecticut and the new england area, separately to new york, also has a responsibility to review and possibly reform the regulatory structure. i've advocated for years that there be great consumer representation and state involvement in this regulatory structure. and i continue to believe that there is a need for reform and greater scrutiny so that we're better prepared not only for the storms which seem to be the new
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normal, these massive storms -- >> yeah. >> -- but also for the everyday needs of providing reliable, more affordable service. >> i hope you don't mind a couple of questions on some d.c.-related matters. we've had you on for years back when you were a.g. faber gave me an old press release from march of 2010 when you sued moody's and standard & poor's for, as you said, knowingly assigning tainted credit ratings to risky investmented backed by subprime loans. why is justice only going after standard & poor's? why is moody's out of this, at least for now? >> the mystery to me is that the department of justice selected only s&p and took so long to bring this lawsuit, as you very aptly have just stated. the state of connecticut, when i was attorney general, sued the ratings agencies for many of the same kinds of abuses that we alleged brought this nation to
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its knees economically, crippled employment, virtually devastated the company, they were the enablers. their actions were essential to the inflated ratings that led people to buy these mortgage-backed securities. so they knowingly participated in the abuses that eventually led to the economic catastrophe in this country. and the mystery to me is exactly as you have asked, why did they not sue the others and why did it take so long? >> do you believe that moody's eventually will be included and do you think the selection of a first amendment expert in abrams is an insight into what their eventual legal defense will be? >> good question. their defense will rest heavily on the first amendment. their defense has always been that they simply provide public opinions and therefore they have a first amendment right to express those opinions without any accountability, without being answerable to anyone because they have that absolute
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right. so retaining an expert, a highly regarded and even renowned expert in this area, i think, is a clue to their defense. but that defense is diminishing in its strength because courts have held that, in fact, under the circumstances that they issue these opinions, the first amendment does not provide them with the kind of blanket absolute immunity that they have enjoyed, they claim. and so i think that they will eventually be held accountable. whether others will be sued, i can't really say because i don't speak for the department of justice. certainly if there is any equity, the others will be held accountable as well. and the strategy may be to go after s&p, the e-mails are devastating. the evidence is overwhelming. the reason that we brought our lawsuit in 2010 applies equally now and perhaps they will eventually go after the others as well. >> senator, stay as dry as you can. we'll be watching what happens with the storm over the weekend. thanks for your time.
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>> thank you. >> senator richard blumenthal of connecticut. the ceo of kimco realty will join us. and then john engler will join us to discuss reducing the country's debt and the effects that could have on big business when "squawk on the street" returns. man these guys are slow. reminds me of our network before cdw virtualized it. how?
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cdw and hp networking implemented a virtual application network that reduces the time to deploy cloud applications from months to minutes. with fewer bottlenecks like this. finally. charles! client golf. aim for the lake. really?
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well, the models said we would get snow and they weren't lying. that is a live picture outside cnbc headquarters in new jersey. the snow is just starting to come down hard now. got some people sanding the driveways. this area is expected to get as much as a foot of snow. but that is nothing compared to what boston is expecting in some areas there, two feet plus. let's get the capital markets op ed. gary kaminsky getting a retail channel check with the ceo of kimco realty. >> i'm here at post 8-d where they trade kimco.
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david henry, great to see you again. welcome. thanks for joining us. >> thank you. >> let's talk about kimco. you guys reported fourth quarter two days ago. in a time where we see activists going after companies for bad cash management, bad capital allocation, what stood out to me with us excellent capital allocati allocation. what drove the quarter? what was that great capital allocation? >> a couple of things are going on. our occupancy was at a high since the great recession, our same-store was at a high since the recession and we have been able to take advantage of those lower interest rates. as an example, we placed $800 million of new mortgages on our properties last year at an average interest rate of 4% compared to maturing mortgages at 7.5%. you picked up 250 basis points on those mortgages. >> when viewers hear about low interest rates, q.e. forever, you're an example of somebody who's taking advantage of the low rates, refinancing and bringing money to the shareholders in the form of dividends.
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dividend yield right now is 4%. if i buy that stock today, how should i think about that 4%? as stable, growing, risky? >> in kimco's case, we have one of the lowest payout ratios in the industry. it's very stable. it's supported by 15,000 leases, about 8,000 tenants. there's a very broad spread of risk. very safe, we think. >> that sounds to me like stable and growing depending on what happens with the top line. >> that's right. >> good. when you came on last time with me a couple of years ago, you said that sell-side analysts were not appreciating what was happening at tjmaxx ] . what are they missing in terms of who's doing really well in the retail space? >> we find it fascinating the dollar store growth.
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four new dollar stores open up every day in the united states. it's a category that's growing like crazy. it's meeting a need. there are value-oriented consumers out there. we think the dollar stores have a long way to run. >> a lot of those stocks traded up very high because there was a lot of anticipation and excitement thinking these were the countereconomy plays. economy was not doing well. own the dollar stores. you think the dollar stores' growth will continue? >> we do. >> interesting take there. i have to ask you about these mega turnaround stories out there, jcpenney and sears. what's happening with jcpenney? is that turnaround going to work? >> they're putting hundreds of millions of dollars back into their stores. they're refreshing, renovating them. the stores that they have renovated look absolutely beautiful. some of their other strategy, we'll have to wait and see. but i think they deserve credit for putting a lot of money into their stores. >> what about sears? you have some sears tenants in
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the sense of kimco. are they going to make it as a retailer? >> it's tough to tell. they have not put the same level of capital back into the stores that jcpenney has. but they own a lot of good real estate. and traditionally, they've been in very good locations. we'll have to wait and see. >> dave, great to see you as always. carl, what i take away from there is simple, the dollar store trade continues. sears, we don't know whether or not is going to make it in terms of a retailer. and as david has always been very honest and transparent, that distribution is safe and it's going to growth. dave henry, thanks for joining us on the floor. carl, back to you. >> great stuff. a few moments left in europe's trading day. what a week they've had. we'll detail the past few sessions with simon in just under three minutes. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business.
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few seconds till the european close. we continue to watch the political narrative there as well as the currency narrative which has led to historic metrics here. >> germany continues to be -- today germany announced its second biggest surplus. trade surplus in 60 years. $188 billion. the euro has been kind to germany. the u.s. data and the chinese data has boosted european
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markets, green across the screen there after we had a bit of a bumpy day earlier in the week. and it's the banks in particular that have led that surge. the banks have done well. and the game k stocks have done well on chris christie's decision to give a trial period in new jersey for online gaming. there's a feeling that other states could follow. maybe the federal government will follow and maybe these will profit. heading into the weekend, island mana ireland managed to do a deal with the rest of europe to bail out anglo irish. it reduces the amount they have to repay by 20 billion euros over the next ten years. that's a game changer for many of the irish economy. during the course of the year, irish yields, they're still on the periphery, have actually
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been falling. now we go into the blackout period on the italian election, two weeks away. yields conversely are rising on italian debt as we go through that period. meanwhile, there was a summit, 27 heads of state for the european union, a summit in brussels today. david cameron, the uk prime minister, won a victory of sorts. they're reducing the budget for wages over the next seven years by 1 billion euros. 262 billion euros. eu leaders have agreed, yes, they are going to try and strike a deal with the united states on a free trade area between the united states and the european union. effectively these guys are now kicking the ball back into obama's court. watch for comment on that in the state of the union address next week. >> just a few days ahead. get home before the snow starts building up. >> i'm running. >> thanks so much. prominent business leaders met with senior administration officials yesterday on cutting the debt with budget cuts and
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new tax nues santelli has more on that. >> welcome, governor. it's great to have you. i know you didn't attend the most recent roundtable meeting at the white house. but maybe you can give me your sense of the current administration and how the business roundtable is trying to navigate. i have three topics. the first one is regulation. i just finished the isaacson book about jobs. first of all, he was wrong. he thought the president would be a one-term president. but when he talked about things like regulatory issues, he said, why should it be easier for the chinese to build a factory here in the u.s.? your thoughts, sir? >> well, the reason i wasn't at the white house, i was over across the street talking about the need for economic growth. i said what we really have in the country is a growth problem. 1% gdp. last quarter, negative actually. the last half of the last century, average 3%. that difference between 1% and 3% is everything. that's where you get the job creation.
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regulation is part of it. immigration reform is part of it. certainly curbing some of these out-of-control deficits are also part of it. but there's a whole lot the president could say in the state of the union address next week to say that america needs to have a growth strategy. and i'm going to start approving pipelines, i'm going to speed up all these chemical plants to take advantage of the cheap natural gas. lime going to replenish the permits so we can get the electrical grid rebuilt. just on and on the list is a long one -- >> governor, governor, let me stop you right there. you really think you're going to hear that tuesday? you really think that's what we're going to hear from the president? listen, i would love to hear all those things -- >> here's our action plan for jobs and economic growth. that's what we need to have. >> instead, you're going to hear more about climate change issues, which is a buster for energy and it's a shame because natural gas would be a great transition fuel to the fantasy land of the renewables that just aren't practical.
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my second issue beyond regulations. i want you to be my tester for the sequester. what are your thoughts about the sequester? be specific. >> the sequestration is going to take effect on march 1st. by the end of the month when they do the continuing resolution, if they want to adjust some of the cuts, in other words, cut some programs nothing and eliminate others, they could easily raise the money. domestic discretionary spending is up almost 14% over the last four or five years. there's nobody in america that doesn't believe that you can't find this money. and so i would say to the appropriators, tweak this or to the president come in and say, look, here's what the dollar amount is but i propose that we do it differently. we held a conference at the roundtable this week on transforming government. everyone agreed that structurally we're working with an hold 19th century governmental structure. there's billions of dollars of savings just by running what we're trying to do more effectively. that alone would cover the
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sequester and more. >> that makes sense, governor. but take the most recent example, the post office. i have nothing against the post office. i love my mailman. but in the end, here we have congress almost trying to tie up the hands of the postmaster general to make changes and even those changes, as pointed out by "the wall street journal," aren't going to make a dent in the deficits or the fact that they're not contributing to their pension plans and the benefits of those employees down the road. next topic, i find this one really fascinating. one person's loophole is another person's need for reform. but when it comes to taxes, i just hate the way there's all these loopholes and then congressional meetings called for reform, they create the loopholes, they create this miss. is it possible, governor, in our lifetime that we're actually going to see tax reform, whether it's on a personal basis, more importantly maybe on a corporate basis? your thoughts? >> on the corporate frond p front, i think we have a
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proposal that we've worked on for a couple of years. the president said he's recognized the corporate taxes in america are too high. he said 28%. but recognizing the problem is the first step toward a solution. he also in december talked about the ability and the need to kind of deal with this taxation of these foreign earnings. we have more than $2 trillion trapped offshore. would love to have all that money right back home. we're the only nation in the world who says, you bring it home, we're going to add to your tax bill. the solution is what you've described, a flatter tax, a broader base, if you will, with a much lower rate and a competitive modernized structure. we haven't touched our code on the business side -- >> governor. i'm out of time. i'm coming up on a hard wrap. next time i have you back, i want to concentrate on two or three very easy recommendations you can have to get us down that tax reform path. thanks for being our guest today. have a great weekend. >> ready to come back. >> always love having the governor.
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thanks, guys. let's bring in bob pisani who says despite -- volume's not the issue today, right? >> everybody keeps saying, bob, are you all alone down there? who cares? the volume is terrible. it's not about the volume. we're at new highs, folks. take a look at the indexes. that's a five-year high intraday on the s&p 500. russell 2000 at an historic high. s&p midcap, historic high on intraday basis. why are we doing so well today? take a look at the s&p 500. we popped up around 8:30 this morning on the s&p 500. there you go, right here. you know why that happened? the trade data came out. normally trade data doesn't move the stock market. today it did. why was it so good? because it was much better than expected. we've been running deficits for years. the deficit has narrowed. china had excellent numbers as well. the bottom line is this, our
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fourth-quarter gdp, it was negative 0.1%. because of the positive trade data, it's going to be revised likely positive. we'll have positive fourth-quarter gdp. that's a plus for the stock market overall. we moved up today on the trade data news. sectors, it's 3 to 2 advancing -- maybe a little bit better. hmo stocks, very strong. molina had strong numbers. but the key story is all about these trade wars and currency wars as well. did you see what happened yesterday? we've got draghi versus japan. this is a big, big international battle right now. draghi talked down the euro. the euro had been strong against the yen and of course today the japanese finance minister came out and said, we're sorry, maybe the yen's gone a little too far. now he's got to go to the g-20 meeting in the next few days and explain why the yen has weakened so dramatically and hopefully people will be too angry with them. many people like the auto
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industry, the europeans and the koreans have been unhappy. look at this, 20% decline in the euro versus the yen in the last -- this is maybe three months. you see the strength in the euro? now look at the dollar. 9 the dollar also against the yen. the yen is weakened against the dollar dramatically as well. look at that. 15% declines. in the currency world, these are enormous moves. and they say, the japanese, we're not trying to ignite a currency war, we're just trying to fight deflation. unfortunately you can't do it without igniting a currency war. that means trade wars. so now he's going to go to that g-20 meeting and they've got to be very careful, the tone, the rhetoric down right now or you're going to see nasty commentary out of that meeting. >> they're not operating in a vacuum at all. nemo has found its way to the northeast. the snow already falling from new york all the way up to maine.
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we'll get the latest on the path of the storm. plus the ceo of one of the nation's biggest online delivery companies tells us how they're preparing for this. and if you should count on getting your chinese food and pizza tonight. ceo of delivery.com is up next. i'm glad we got cdw and cisco to design our data center. yeah, the cisco ucsc series server, with the intel xeon processors, help us scale smoothly, like a perfect golf swing. how was it before? clunky and full of unnecessary impediments. like charles' swing. i heard that. more "likes." more tweets. so, beginning today, my son brock and his whole team will be our new senior social media strategists. any questions? since we make radiator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes."
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and goldman's 20% run this year, can anything stop that rally? two traders, two opinions. one big debate in about 15 minutes. see you at the top of the hour. >> thanks a lot, scott. winter storm nemo causing havoc all around the northeast as airports have to cancel nearly 4,000 flights due to the storm. rehema ellis has more on that at laguardia airport. >> reporter: traffic is not nearly as heavy as it is here. look at this board. a lot of yellow. that's the color of the day. but there are a few lucky people. a flight to miami for 12:45 is still scheduled on time. but according to flightaware.com, 3,700 flights have been canceled across the country and hundreds of flights have been canceled here in the new york area here, the three airports here. busy morning as people tried to
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get out ahead of the storm. the good news is the airlines are waiving the cancellation fee. we're hearing that new york's area airports, the domestic carriers are probably going to shut down operation sometime between 2:00 and 5:00 this afternoon. it seems like most people got the memo that there's a storm under way as we are doing live television here. and they have stayed away from the airport here. there's not a lot of hustle and bustle as you would normally here. >> rehema, nothing rattles you. you could do that live shot in any condition. thanks, good to know. talk to you soon. >> reporter: all right, carl. as the northeast does brace for nemo, restaurants and grocers are stocking up for those staying in and ordering in. what could you expect tonight? jed pleknor is the ceo of delivery.com. there must be some routine you use to get your infrastructure
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in order to get through however long this is going to last. >> that's right. we have at least in the new york metro area about 3,500 merchants. as i mentioned, the large portion of those are in the restaurant category. our job is to empower the neighborhood economy to work and work through the storm. >> we talked about traditional retail fronts. a mcdonald's is going to feel this. is it net, is it accretive to you because people order in from home? >> mcdonald's has some of their franchise owners in new york with listings on our site. but just to give you a snapshot of what happened during the january -- the cold weather snap that occurred in late january, we saw a merchant in the east village with orders going up by 30%. liquor stores in the area went up by 100%. >> something everybody who's been through this can understand. you think back to some of the businesses that have tried this before in other eras. in new york city, there was a
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cosmo. what did they do wrong that you are apparently doing right? >> our job is to bring the merchants' inventory onto our website and market on their behalf. what we do not do is those companies handled the last mile fulfillment. we sent the inventory to the merchant. their job is to get to it the local consumer. >> how about funding? where are you in the funding process and what's the end game for a company like this? >> we are -- our main investor is the venture arm of cantor fitzgerald. they continue to be very supportive in this growth. >> over 40 states? >> we're in 50 cities actively. >> doesn't seem like the kind of model that gets easier with scale. it's all local in the end. or is that the case? maybe it is easier to go nationwide on something like this? >> we're a technology business. our job is to build technology. enables the merchant to do what
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they do best, fulfillment of the order. as long as we can bring on the new verticals we're talking about, grocer, liquor stores, also things that could be coming from a local deli, anything that we can get onto our website, ultimately their job is to get it to the consumer. >> if all those verticals, the grocers, the pet store, the florists, is one outpacing the others by a significant degree? in terms of long-term growth? >> sure. to date, it has been for the most part consumables or perishables. we've started to see nonperishable products, like from a local hardware store, being demanded on our site. >> we'll keep an eye on you guys. congratulations on one of the best domain names in the history of man. thank you for coming in. evernote was founded in 2008 just before the crisis hit. now it's worth more than $1 billion. find out how this start-up
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survived and thrived during the recession and how it plans to stay successful. evernote's ceo will join us live right after the break. this is $100,000. we asked total strangers to watch it for us. thank you so much. i appreciate it. i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money? if your bank takes more money than a stranger, you need an ally. ally bank. your money needs an ally. ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box.
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not a very pretty picture there. there is an elite group of silicon valley start-ups valued
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at hoeover $1 billion as was highlighted this week. evernote, by way of their suite of organization apps, is a member of the billion-dollar club. evernote's valuation is rumored to be closer to $2 billion. how did a productivity app launched in the midst of the financial crisis grow to a valuation rivaling companies like "the new york times" and arch coal? phil libin is the co-founder and ceo of evernote and he joins us from palo alto. good morning to you. >> good morning. >> you must have gotten hounded with questions about valuation this week. your response to some of those reports and the rumors? >> we do, but we don't really think about the valuation very much. i think there's a lot of confusion when comparing private company and public company valuations. they don't really mean the same thing. what's important to us is trying to build a 100-year company. we want to build long-term value. >> that's going to start with a new chapter, that is evernote
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business which for anyone who's ever used evernote might come as a bit of a surprise in terms of the -- an additional fee and a little more capability. can you talk about it? >> sure. we always build evernote for us. we want to use it personally, for every part of our lives. and as we started getting to be a bigger company, we're close to 300 people now. we realize that we really needed something to still run the company with evernote. we made evernote business so you can have a great evernote business at work as well as at home. most of our users have already been doing that. we just wanted to make it official and a little bit better. >> we had a launch of the new blackberry a couple of weeks ago, part of the allure of that product, the company says, you can use one tool to manage your work life, your personal life, your social life. your point is that those lives sort of are always cominglincom right? >> right, it's life.
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it's work/life integration, how elegantly you can manage the mountain of information that's coming to you all the time determines how happy you are. how happy you are determines how productive you are, with your family, with your health and at work. >> you talk about building a company that will last 100 years. you want to go public. i just wonder your sense -- getting your sense about the environment out there, when that's likely to happen, what you make of market conditions right now. >> well, it's not that we want to go public. i think going public is the morally correct thing to do. if we're going to ask the whole world to trust us with their most important lifetime members for 100 years, i think it's fair to give people a chance to be owners of the company to be owners. i think it's right to do it but not anytime soon. we're planning this very slowly. i think it's in a few years at best. >> as you said, about 300 workers and people talk a lot about the various perks you give them. forgive me if i have some of these wrong. occasional maid service, money
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to go on vacation on a regular basis. why do that? you must have done some modeling that shows you the return is worth it in the end, right, beyond just p.r.? >> yeah, the return is huge. in fact, the money that we spend on it is relatively small compared to what we get in improved productivity. we just assume that it's hard to get a job at evernote. and once you're here, people who are here want to be here. they want to be productive. they want to do as much as they can. our job as management is just to knock down all the obstacles that prevent people from being productive. anytime we can spend more money to make you more productive and smarter, that's a good trade. >> i asked you about blackberry a moment ago. you've been on them for years. you must have had some thoughts on the launch, maybe some thoughts on the fact that it's not coming to the states as some had hoped. how successful is this one going to be? >> well, i'm rooting for blackberry. i've been a long-term fan for years and years and years. i've sort of wandered away from the flock, as many people have.
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but i would love to see them succeed. love to see the brand, the product continue. i have no idea. i got out of the business of predicting things a long time ago. we hope they do succeed. if we can be helpful in that, we'll be happy to do it. >> we'll keep an eye on evernote business. congratulations on a nice piece in "the times." and please come back. >> thank you. when we come back, find out why our interview with that 16-year-old actress-turned-trader rachel fox lit up the twitterverse today. back in a moment. >> i usually go on technicals, what is overbought and oversold. i try and look at stocks that are less affected by news. [ male announcer ] i've seen incredible things.
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